updated 07:55 am EDT, Mon March 28, 2011

Google to test NFC with Citigroup and MasterCard

Google's trials of NFC-based phone payments gained more tangible details through a leak early Monday. The plan described by the WSJ would allow Citigroup debit and MasterCard credit card owners to make payments by swiping a Nexus S, or future Android 2.3 phones with NFC, near a reader at the counter. VeriFone would still be involved, the sources said, and would be the one providing the payment machines.

Users would get an app not just to make payments but to manage an account and track spending.

Most have already expected that it would go live later this year. Walmart has gone on the record as saying it was informed about NFC by Google, but discussions were early and didn't involve a rollout.

The Google system could draw controversy. Along with expected and usually welcome promos at the time of the purchase, Google would also use the payment to pass on information about shoppers to the stores to let them target ads to customer phones. Its method would let Google show the direct effect of ads, but it would also give the company deep details of customer spending. Stores would also have information about customers that they wouldn't necessarily consent to giving.

Apple is widely rumored to be implementing NFC in the iPhone 5 and could tie short-range wireless into iTunes for certain payments. The company has historically been much less willing to share private customer data and could face some resistance from those stores that want detailed information, but it could also avoid legal trouble and win more customer favor.

Android's splintered OS base also makes it more likely that Apple's approach would have more of a foundation. Android 2.3 makes up about 1.7 percent of Google's user share, not all of which would have NFC onboard. Customers would need new iPhones to use an Apple system, but the platform simplicity and frequent upgrading would lead to a larger footprint.

Nokia and RIM have also pledged NFC support in 2011 but haven't said which payment systems they would support in the US.